Systems and methods for implementing real estate value insurance

ABSTRACT

To protect a person with a property interest in real property against a loss of market value thereof, a base market value of the real property is determined at a current time when the property interest in the real property arises or thereafter, and a number of types of events that cause the real property to lose market value as compared with the base market value are defined. A number of the defined types of events are selected, and a real estate market value policy is issued to the person at about the current time. The policy promises to compensate the person for any loss experienced by the person if the real property loses market value as compared with the base market value based on any of the selected types of events.

CROSS-REFERENCE TO RELATED APPLICATION(S)

The present application is filed concurrently with and shares a commontitle and disclosure with the following applications, each of which ishereby incorporated herein by reference in its entirety:

-   -   U.S. patent application Ser. No. 12/192,424;    -   U.S. patent application Ser. No. 12/192,441;    -   U.S. patent application Ser. No. 12/192,460; and    -   U.S. patent application Ser. No. 12/192,475.

FIELD

The present disclosure is directed to systems and methods that providedan insurance policy that covers a loss in market value associated withreal estate.

BACKGROUND

An owner of a piece of real property may purchase property ownersinsurance to protect against losses associated with the real property,such as for example fire damage, wind damage, water damage, and otherdamage that may be experienced in connection with the property.Accordingly, if for example a tree is blown down and falls into astructure on the real property, such property owners insurance wouldtypically cover the cost to repair the structure. However, andsignificantly, the property owners insurance likely does not cover thecost to replace the fallen tree with a similar tree, even if the fallentree represented an amount of value to the real property that has beenlost.

More generally, property owners insurance typically covers losses tostructures on real property and related improvements (i.e., fences,pipes, light posts, patios, walkways, etc.), but does not cover lossesto natural features on real property (i.e., trees, rock formations,ponds, shrubs, etc.). Moreover, and importantly, such property ownersinsurance does not cover losses that are intangible. That is, if acertain piece of real property includes a pleasant view, such as forexample a view of a city skyline, a valley, an ocean, a river, a statue,a park, etc., and the pleasant view is lost because another propertyowner builds a blocking structure on land thereof, the intangible lossof the view associated with a piece of real property is not covered by acorresponding property insurance policy.

In a similar manner, a property insurance policy does not typicallycover a loss associated with a corresponding piece of real property thatarises from an objectionable use of adjacent property, such as forexample a neighboring property that is not well-maintained, that emitsan objectionable odor, or that is employed for illicit purposes.Moreover, a property insurance policy does not typically cover a lossassociated with a corresponding piece of real property that arises fromoverall market conditions, such as for example an overall drop in realestate value due to market conditions, not to mention a loss that arisesfrom specific factors associated with the real property that are beyondthe control of the owner of the real property, such as for example if atoxic chemical is spilled on the property and is not easily remediated.

Real property normally increases in value over time due to marketconditions based on factors such as a finite amount of land, inflation,and regional real estate development. However, the value of realproperty can nevertheless decrease due to adverse market conditions aswell as losses in connection with the real property that are perceivedto be adverse to the overall desirability of the real property.Particularly with regard to adverse market conditions, and as is setforth in U.S. Pat. Pub. No. 2004/0260578, there are a variety ofpolitical, social and economic events that can cause fluctuationsresulting in suppressed real estate values lasting for varying periodsof time. Some fluctuations can be caused by an industry wide recessionsuch as experienced in the oil and gas sectors in the 1980s, or thedownturn in certain high technology sectors at the beginning of thetwenty-first century. Global economic shifts, such as the increasedproduction of high quality low cost steel in the Pacific Rim can causeeconomic displacement in regions with economies fueled by steelproduction. Sometimes, such downturns can be permanent.

An owner of real property ought not to be concerned with a loss in themarket value of the real property for whatever reason, unless of coursesuch loss impinges financially on the owner, such as for example if theowner wishes to sell the property or pledge the property as collateral,which of course is a rather large exception. Nevertheless, in manycases, if such an owner can wait, the market value lost is regained.Sometimes, however, the loss of market value is permanent, such as forexample if not caused by overall market conditions, or the loss ofmarket value does indeed impinge financially on the owner because theowner desires to sell or pledge the real property. In a particularlyunwanted scenario, the owner is forced to sell the real property at aloss for whatever reason, and the sale value exceeds debt such as amortgage that must be repaid at such sale, in which case the owner maybe required to contribute additional capital at the sale to repay thedebt.

Accordingly, a need exists for an insurance policy that covers at leastsome losses to real estate market value associated with a piece of realproperty.

SUMMARY

The aforementioned needs are satisfied at least in part by a method andmechanism that protect a person with a property interest in a piece ofreal property against a loss of market value of the real property duringownership of the property interest. A base market value of the realproperty is determined at a current time when the property interest inthe real property arises or thereafter, and a number of types of eventsthat cause the real property to lose market value as compared with thebase market value are defined. A number of the defined types of eventsare selected, and a real estate market value policy is issued to theperson at about the current time. The policy promises to compensate theperson for any loss experienced by the person if the real property losesmarket value as compared with the base market value based on any of theselected types of events.

To issue the policy, a number of types of events that may cause a lossin the market value of the property are identified, a probability ofeach type of event occurring during the term of the policy is estimated,and an impact of each type of event on the market value of the propertyis also estimated. Based on the estimated probability and impact of eachtype of event, it is determined whether each type of event is to becovered by the policy. Thereafter, a probable loss is defined for eachcovered type of event, the defined probable losses for all of thecovered types of events are summed to arrive at an expected cost ofclaims for the policy, and a premium to be paid for the policy isderived based on the expected cost of claims. The real estate marketvalue insurance policy is then issued to the person in return for thederived premium.

The real estate value insurance policy as issued need not require that asale of the real property occur in order to calculate a loss. Instead,in at least some instances the loss may be defined prior to such sale.Also, the real estate value insurance policy may allow for remediationof a loss rather than monetary compensation. Additionally, the realestate value insurance policy may exclude losses for which the propertyowner is responsible, such as for example losses that occur by theowner's act or lack of action, or losses that the owner should haveforeseen, among other things.

BRIEF DESCRIPTION OF THE DRAWINGS

The foregoing summary, as well as the following detailed description ofvarious embodiments of the present innovation, will be better understoodwhen read in conjunction with the appended drawings. For the purpose ofillustrating the embodiments, there are shown in the drawingsembodiments which are presently envisioned. As should be understood,however, the embodiments of the present innovation are not limited tothe precise arrangements and instrumentalities shown. In the drawings:

FIG. 1 is a block diagram of an example of a computing environmentwithin which various embodiments of the present innovation may beimplemented;

FIG. 2 is a block diagram of a system including a real estate valueinsurance policy to an owner of real property in accordance with variousembodiments of the present innovation; and

FIG. 3 is a flow diagram showing actions performed in the connectionwith the policy of FIG. 2 in accordance with various embodiments of thepresent innovation;

FIG. 4 is a flow diagram showing actions performed in the course of theissuer issuing the policy of FIG. 2 in accordance with variousembodiments of the present innovation; and

FIG. 5 is a chart showing a risk matrix as may be constructed by theissuer in the course of issuing the policy of FIG. 2 in accordance withvarious embodiments of the present innovation.

DETAILED DESCRIPTION Example Computing Environment

FIG. 1 is set forth herein as an exemplary computing environment inwhich various embodiments of the present innovation may be implemented.The computing system environment is only one example of a suitablecomputing environment and is not intended to suggest any limitation asto the scope of use or functionality. Numerous other general purpose orspecial purpose computing system environments or configurations may beused. Examples of well-known computing systems, environments, and/orconfigurations that may be suitable for use include, but are not limitedto, personal computers (PCs), server computers, handheld or laptopdevices, multi-processor systems, microprocessor-based systems, networkPCs, minicomputers, mainframe computers, embedded systems, distributedcomputing environments that include any of the above systems or devices,and the like.

Computer-executable instructions such as program modules executed by acomputer may be used. Generally, program modules include routines,programs, objects, components, data structures, etc. that performparticular tasks or implement particular abstract data types.Distributed computing environments may be used where tasks are performedby remote processing devices that are linked through a communicationsnetwork or other data transmission medium. In a distributed computingenvironment, program modules and other data may be located in both localand remote computer storage media including memory storage devices.

With reference to FIG. 1, an exemplary system for implementing aspectsdescribed herein includes a computing device, such as computing device100. In its most basic configuration, computing device 100 typicallyincludes at least one processing unit 102 and memory 104. Depending onthe exact configuration and type of computing device, memory 104 may bevolatile (such as random access memory (RAM)), non-volatile (such asread-only memory (ROM), flash memory, etc.), or some combination of thetwo. This most basic configuration is illustrated in FIG. 1 by dashedline 106. Computing device 100 may have additionalfeatures/functionality. For example, computing device 100 may includeadditional storage (removable and/or non-removable) including, but notlimited to, magnetic or optical disks or tape. Such additional storageis illustrated in FIG. 1 by removable storage 108 and non-removablestorage 110.

Computing device 100 typically includes or is provided with a variety ofcomputer-readable media. Computer-readable media can be any availablemedia that can be accessed by computing device 100 and includes bothvolatile and non-volatile media, removable and non-removable media. Byway of example, and not limitation, computer-readable media may comprisecomputer storage media and communication media.

Computer storage media includes volatile and non-volatile, removable andnon-removable media implemented in any method or technology for storageof information such as computer-readable instructions, data structures,program modules or other data. Memory 104, removable storage 108, andnon-removable storage 110 are all examples of computer storage media.Computer storage media includes, but is not limited to, RAM, ROM,electrically erasable programmable read-only memory (EEPROM), flashmemory or other memory technology, CD-ROM, digital versatile disks (DVD)or other optical storage, magnetic cassettes, magnetic tape, magneticdisk storage or other magnetic storage devices, or any other mediumwhich can be used to store the desired information and which canaccessed by computing device 100. Any such computer storage media may bepart of computing device 100.

Computing device 100 may also contain communications connection(s) 112that allow the device to communicate with other devices. Each suchcommunications connection 112 is an example of communication media.Communication media typically embodies computer-readable instructions,data structures, program modules or other data in a modulated datasignal such as a carrier wave or other transport mechanism and includesany information delivery media. The term “modulated data signal” means asignal that has one or more of its characteristics set or changed insuch a manner as to encode information in the signal. By way of example,and not limitation, communication media includes wired media such as awired network or direct-wired connection, and wireless media such asacoustic, radio frequency (RF), infrared and other wireless media. Theterm computer-readable media as used herein includes both storage mediaand communication media.

Computing device 100 may also have input device(s) 114 such as keyboard,mouse, pen, voice input device, touch input device, etc. Outputdevice(s) 116 such as a display, speakers, printer, etc. may also beincluded. All these devices are generally known to the relevant publicand therefore need not be discussed in any detail herein except asprovided.

Notably, computing device 100 may be one of a plurality of computingdevices 100 inter-connected by a network 118, as is shown in FIG. 1. Asmay be appreciated, the network 118 may be any appropriate network, eachcomputing device 100 may be connected thereto by way of a connection 112in any appropriate manner, and each computing device 100 may communicatewith one or more of the other computing devices 100 in the network 118in any appropriate manner. For example, the network 118 may be a wiredor wireless network within an organization or home or the like, and mayinclude a direct or indirect coupling to an external network such as theInternet or the like.

It should be understood that the various techniques described herein maybe implemented in connection with hardware or software or, whereappropriate, with a combination of both. Thus, the methods and apparatusof the presently disclosed subject matter, or certain aspects orportions thereof, may take the form of program code (i.e., instructions)embodied in tangible media, such as floppy diskettes, CD-ROMs, harddrives, or any other machine-readable storage medium wherein, when theprogram code is loaded into and executed by a machine, such as acomputer, the machine becomes an apparatus for practicing the presentlydisclosed subject matter.

In the case of program code execution on programmable computers, thecomputing device generally includes a processor, a storage mediumreadable by the processor (including volatile and non-volatile memoryand/or storage elements), at least one input device, and at least oneoutput device. One or more programs may implement or utilize theprocesses described in connection with the presently disclosed subjectmatter, e.g., through the use of an application-program interface (API),reusable controls, or the like. Such programs may be implemented in ahigh-level procedural or object-oriented programming language tocommunicate with a computer system. However, the program(s) can beimplemented in assembly or machine language, if desired. In any case,the language may be a compiled or interpreted language, and combinedwith hardware implementations.

Although exemplary embodiments may refer to utilizing aspects of thepresently disclosed subject matter in the context of one or morestand-alone computer systems, the subject matter is not so limited, butrather may be implemented in connection with any computing environment,such as a network 118 or a distributed computing environment. Stillfurther, aspects of the presently disclosed subject matter may beimplemented in or across a plurality of processing chips or devices, andstorage may similarly be effected across a plurality of devices in anetwork 118. Such devices might include personal computers, networkservers, and handheld devices, for example.

Real Property Market Value Insurance Policy

In various embodiments of the present innovation, and turning now toFIG. 2, a real property market value insurance policy 10 is provided tocover a loss experienced by an owner 12 of a piece of real property 14when the real property 14 loses market value, either due to overallmarket conditions or due to a specific event in connection with the realproperty 14 and as defined by the policy 10. The policy 10 may bepurchased either when the owner 12 purchases the real property or aftersuch purchase. The policy provides that if the owner experiences a lossin the value of the real property as defined by the policy, the issuer16 of the policy, which is presumably an insurance company, will pay outan amount as defined by the policy to the owner or an assignee thereof.

As should be understood, the real property 14 may be most any realproperty, including land, land with improvements thereon such as forexample a house, improvements without attached land, such as for examplea condominium apartment or a co-operative apartment among other things,improvements in non-traditional forms, such as for example time-sharedproperty, and the like. Moreover, the real property 14 may beresidential property, commercial property, property held in trust, etc.Note that the owner 12 of the real property 14 insured by the marketvalue insurance policy 10 likely already has a more traditional propertyinsurance policy 18 on the property 14. Accordingly, it should beunderstood that the policy 10 of the present innovation is in additionto such more traditional property insurance policy 18 and is intended tocover market value losses that are not already covered by such moretraditional property insurance policy 18.

The market value of the real property 14 should be understood to be thevalue of the property 14 such as may be obtained by the owner 12 if soldto a willing buyer in an arm's length transaction. Thus, the marketvalue of the property 14 should be valued according to an appraisal ofsuch property 14 as may be performed by the average competent appraiser.Note here that the market value is not necessarily represented by apurchase price paid by the owner 12, for the reason that the owner 12may have paid too much or too little, and at any rate the purchase pricemay have been affected by unusual circumstances particular to the owner12 and the seller that sold the property 14 to the owner 12.

The market value policy 10 as purchased by the owner 12 as was set forthabove intended to cover losses not covered by the traditional policy 18,although some overlap between the policies 10, 18 may neverthelessoccur. Accordingly, if as was set forth above a tree is blown down andfalls into a structure on the real property 14, the property insurancepolicy 18 would typically cover the cost to repair the structure, andthe market value policy 10 would cover the cost to replace the fallentree with a similar tree, especially inasmuch as the fallen treerepresents a loss of value to the real property 14.

More generally, the property insurance policy 18 would typically coverlosses to structures on real property 14 and related improvements. Incontrast, the market value policy 10 would cover at least some losses tonatural features on real property 14 such as trees, rock formations,ponds, shrubs, etc., as well as at least some losses that areintangible, such as the loss of a pleasant view, the loss of quietsurroundings, the loss of a pleasant environment without objectionableodors, sounds, sights, activities, etc. Significantly, the market valuepolicy 10 may cover losses to market value from external forces that areboth intangible and not arising from adjacent neighbors, includinglosses of market value from overall market conditions such as a realestate bust, overall financial conditions such as a recession, toxicchemical spills, and the like.

The loss of market value covered by the policy 10 may be any appropriateloss of market value. For example, the loss may be defined as adevaluation of the real property 14, such as may occur during a downturnin real estate values in general or otherwise. Alternately or inaddition, the loss may be defined as a devaluation arising from aspecific action, such as for example the loss of a view, thecommencement of an objectionable activity on adjacent property, the lossof a natural feature on the property such as a tree that was consideredto add value to the real property 14, etc.

Notably, the loss may be defined by the policy 10 to arise when theowner 12 suffers the devaluation and before the owner 12 sells theproperty 14 at a loss, when the owner 12 sells the property 14 at aloss, when the owner appraises the property 14, perhaps in connectionwith pledging same as collateral, or when the owner attempts to sell theproperty 14 and cannot do so for lack of a buyer, among other things.Notably, inasmuch as the property 14 may regain value that would accrueto the owner 12 if the loss is paid before the property 14 is sold, careshould be taken not to reward the owner 12 for a temporary loss thatcould later be followed by a gain. For example, the insurance policy 10may require that payment on a claim for a loss incurs a lien on theproperty 14 so as to offset the payment with any future gain when theproperty 14 is sold.

The amount of the loss may be defined by the policy 10 in anyappropriate manner. For example, the loss may defined based on thepurchase price paid by the owner 12 for the property 14 or an appraisalof the property 14 when the policy 10 is issued, and an appraisal of theproperty 14 at the time the loss arises. Further, the amount of the lossmay be subject to a deductible amount that is either a fixed value or apercentage of the amount of the loss, and may be limited to a minimumand/or maximum value before or after any deductible is applied. Further,the loss may be limited to a particular time frame, such as for exampleonly between five and ten years after the policy 10 is issued, andperhaps only if the policy 10 remains in force when the loss arises.

Notably, if the owner 12 of an insured piece of property 14 makes aclaim for a loss that arises in connection therewith, the claim onceapproved can be paid based on a calculated value of the loss of marketvalue and after taking into consideration any deductibles of other losslimitations. Alternately, and if advisable, the issuer 16 may decide totake a remediating action that would restore the market value or aportion thereof so as to mitigate such payment on the claim. Forexample, if a loss of 40,000 USD is claimed based on the destruction ofa tree on the real property 14 but the cost to restore the property 14by replacing the tree is 20,000 USD, the issuer 16 would likely choosereplacing the tree rather than paying out the 40,000 USD claim.

Note here that if remediation restores only a portion of market valuelost, the remaining portion likely is compensated on a cash basis. Notetoo that the decision on whether to remediate at least a portion of aloss should take into account not only the current cost to remediate butalso possible future costs. For example, replacing the tree may cost the20,000 USD set forth above, but it may also be likely that thereplacement tree could also be destroyed, in which case the cost couldbe another 20,000 USD or a decision to pay the entire 40,000 USD. Thus,paying 20,000 USD to remediate could save 20,000 USD or could lead topaying a total of 40,000 USD or even 60,000 USD or more.

Presumably, the policy 10 as issued includes terms to guard against anyfraud that the owner 12 may attempt to perpetrate. For example, to guardagainst an artificial loss, such as for example may be achieved byselling the property 14 at an artificially low price, the policy 10 mayrequire that each loss be proved by an appraisal of the property 14 atthe time the loss arises, and that the issuer 16 can challenge suchappraisal as appropriate. More generally, to guard against any fraud,the policy 10 may exclude certain losses, such as for example lossesthat occur by the unreasonable action or inaction of the owner 12,losses that the owner 12 could reasonably have prevented, losses due tonegligence or incompetence on the part of the owner 12, and the like.

The policy 10 may be established by the owner 12 when the owner 12either purchases the property 14 or pledges same as collateral, or atany other time. In any case, the property 14 should be appraised toascertain the value thereof for purposes of defining any future loss.The policy 10 as purchased may specify a one-time paid up premium orrecurring premiums, and may specify that the loss must occur while thepolicy 10 is in force. As was alluded to above, the issuer 16 of thepolicy 10 is typically an insurance company but can be another type ofcompany or even an individual.

Turning now to FIG. 3, it is seen that an owner 12 wishes to purchase areal property market value insurance policy 10 from an issuer 16 withregard to a piece of real property 14. Accordingly, the owner 12requests such a policy 10 from the issuer 16 (301). In response, theissuer 16 defines a base market value for the property 14 (303), eitheras a purchase price if the owner 12 is purchasing the property 14 or hasrecently purchased the property 14, or as an appraised value of theproperty 14 as provided by an appraiser, defined a premium (305), andissues the policy 10 to the owner 12 of the property 14 (307).

In one example, the policy 10 is issued for a predetermined period suchas a year, during which the terms of the policy 10 including a premiumpaid and a base market value for the property 14 remain constant. Thepolicy 10 can then be renewed for a like period, although perhaps with adifferent premium and/or other terms. Notably, the base market value ofthe property 14 as set forth in connection with the renewed policy 10may be adjusted or may remain constant. If adjusted, such adjustment maybe based on a new appraisal or on a defined mathematical formula.

As is usual, the premium established with regard to the policy 10 isbased on a calculation of the risk of loss that is incurred inconnection with the policy 10. Thus, the premium is established from avariety of factors, including but not limited to the base market value,market volatility at the time the policy 10 is established, the locationof the real property 14, and particularly compiled statistics regardingtypes of potential losses that may result in a claim under the policyand average amounts thereof. Such statistics are generally known orshould be apparent to the relevant public and therefore need not be setforth herein in any detail other than that which is provided. Notably,such statistics should take the location of the real property 14 intoaccount, especially inasmuch as the market value for any piece ofproperty 14 is often highly dependent on the location thereof.

Returning to FIG. 3, it is seen that the owner 12 makes a claim on thepolicy 10 based on having suffered a loss in the market value of theproperty 14 as a result of some loss event (309). For example, the lossevent may be the sale of the property 14 at a loss, or else a loss asdefined by the policy 10 that occurs prior to such a sale. In response,the issuer 16 processes the claim (311) by determining among otherthings that the loss is covered by the policy 10, a market value for theproperty 14 such as may be obtained from an appraisal, and that the lossis not fraudulent or otherwise the fault of the owner 12.

Presuming that the claim is approved, the amount to be paid iscalculated based on the difference between the base market value for theproperty 14 as set forth in the policy 10 and the market value when theloss arose, and also based on any deductible or other limitations on theloss as set forth in the policy 10 (313). Thereafter, the amount of theloss as adjusted by any deductibles or limitations is paid to the owner12 (315), or else the issuer takes an appropriate remediating action ifavailable, advisable, and capable of remediating the loss as experiencedby the owner 12 (317).

Turning now to FIG. 4, it is seen that from the point of view of theissuer 16, providing the policy 10 to the owner 12 with regard to apiece of real property 14 thereof is performed generally in thefollowing manner. Preliminarily, the issuer upon being requested toissue the policy 10 as at 301 performs an assessment regarding the risksincurred by issuing a policy 10 to the owner 12 covering the realproperty 14. In such a assessment, and referring also to FIG. 5, theissuer 16 identifies a number of likely types of events that may cause aloss in the market value of the property 14 (first column in FIG. 5)(401 in FIG. 4), estimates a probability of each type of event occurringduring the term of the policy 10 and also the impact of each type ofevent on the base market value of the property 14 (second and thirdcolumns) (403, 405), and based on the estimated probability and impactof each type of event determines whether each type of event is to becovered by the policy 10 (fourth column) (407). Also, the issuer 16 mayin addition to deciding to cover a particular type of risk may decide onappropriate exclusions, pre-existing conditions, and other limitationsthat are to be included in the policy 10.

Generally, although by no means exclusively, the issuer 16 would notcover a type of event that has too high a probability or that has toohigh an impact, or any type of event for which the risk is notwell-understood for effective pricing. For example, and as shown in FIG.5, the issuer 16 has decided to cover losses due to fire, flood, wind,and land deformation (mudslide, e.g.) damage, each of which has arelatively low probability of occurrence, but has decided to foregocovering recession, a local real estate crash, chemical damage, drought,and environmental regulatory changes. With regard to all but chemicaldamage, and as can be seen, the probability of loss is relatively high,and therefore the risk is to be avoided by the issuer. In contrast, theprobability of loss for chemical damage is relatively low but the lossimpact is high, and therefore also to be avoided by the issuer 16.

In any event, for each type of event to be covered, the issuer 16 thendefines minimum and maximum losses expected from such an event occurring(fifth and sixth columns) (409), as the base market value for theproperty 14 defined as at 303 multiplied by a range of the impact of theloss from the third column. Based thereon, the issuer 16 then defines amaximum probable loss for each type of event as the maximum lossexpected (sixth column) (411) multiplied by the probability of the eventoccurring (second column). The maximum probable losses for all types ofevents covered are then summed to arrive at an expected cost to theissuer 16 in connection with issuing the policy 10 (413).

Thereafter, the issuer may set the premium for the policy 10 based onthe expected cost as well as other factors (415). Such other factors aregenerally known or apparent to the relevant public and therefore neednot be set forth herein in any detail other than that which is provided.Generally, in addition to the expected cost, the premium is based on anadministrative cost to underwrite, quote, fulfill, and otherwise servicethe policy 10, a profit margin, and perhaps an adjustment as may benecessary or desirable to be competitive with other issuers 16. Ofcourse, assuming the policy 10 is acceptable to the owner 12, the issuer16 issues the policy 10 thereto in return for payment of the premium setas at 415 (417).

Of course, the issuer must also service the policy 10 by billing forpremiums, collecting the billed premiums and investing the proceeds asmay be deemed advisable, processing claims, handling renewals, handlingappraisals, and other typical insurance functions. Such functions asshould be understood are generally known or should be apparent to therelevant public and therefore need not be set forth herein in anydetail. Accordingly, such insurance functions may be performed in anyappropriate manner without departing from the spirit and scope of thepresent innovation.

CONCLUSION

The programming believed necessary to effectuate the processes performedin connection with the various embodiments of the present innovation isrelatively straight-forward and should be apparent to the relevantprogramming public. Accordingly, such programming is not attachedhereto. Any particular programming, then, may be employed to effectuatethe various embodiments of the present innovation without departing fromthe spirit and scope thereof.

In the present innovation, systems and methods provide a market valueinsurance policy 10 that covers at least some losses incurred by anowner 12 due to real estate market value associated with a piece of realproperty 14. The policy 10 covers at least some losses prior to theowner 12 of the real property 14 selling same. The market valueinsurance policy 10 is implemented so as to define risks unique to themarket value of the real property 14, and to avoid fraud by the owner12.

It should be appreciated that changes could be made to the embodimentsdescribed above without departing from the innovative concepts thereof.For example, although the present innovation is set forth primarily interms of real property 14 comprising land, such real property need notnecessarily include land. Likewise, although the present innovation isset forth primarily in terms of an owner 12 of the real property 14purchasing the policy 10, another entity may also purchase the propertyif deemed appropriate, such as for example a tenant of the real property14, a mortgagee, an agent, etc. It should be understood, therefore, thatthis innovation is not limited to the particular embodiments disclosed,but it is intended to cover modifications within the spirit and scope ofthe present innovation as defined by the appended claims.

1. A method of protecting a person with a property interest in a pieceof real property against a loss of market value of the real propertyduring ownership of the property interest, the method being performed bya hardware computing device including a processor, a memory, and acommunications module, the method comprising: determining a base marketvalue of the real property at a current time, the current timecomprising one of when the property interest in the real property arisesand after when the property interest in the real property arises;defining in the memory of the computing device a number of types of lossevents that cause the real property to lose market value as comparedwith the base market value, each of the number of types of eventsoccurring prior to the person selling the property interest; storing thedefined types of loss events in the memory; selecting a number of thedefined types of loss events for which the person is to be protected;issuing to the person at about the current time a real estate marketvalue insurance policy, the policy promising to compensate the personfor any loss experienced by the person when the real property losesmarket value as compared with the base market value based on any of theselected types of loss events, the issued policy not requiring theperson to sell the property interest to establish the loss;establishing, using the processor, a premium with regard to the policybased on a calculation of a risk of loss incurred in connection with thepolicy; collecting the established premium; receiving a notification ofan occurrence of one of the selected types of loss events; transmittinginformation to compensate the person with a payment equal to a value ofthe one of the selected types of loss events; thereafter, receiving,using the communications module, a notification of a sale of theproperty interest; determining that the property interest has regainedat least a portion of the value of the one of the selected types of lossevents; and collecting an offset payment from the person to offset thepayment.
 2. The method of claim 1 wherein the person with the propertyinterest in the piece of real property is an owner of the real property.3. The method of claim 1 wherein determining the base market value ofthe real property comprises the market value thereof at the current timesuch as may be obtained if sold to a willing buyer in an arm's lengthtransaction.
 4. The method of claim 1 wherein the real property isselected from land, land with improvements, and improvements withoutattached land.
 5. The method of claim 1 wherein the market value policycovers losses not covered by a property insurance policy.
 6. The methodof claim 1 further comprising transmitting information to incur a lienon the property interest equal to the payment.
 7. A computer-readablestorage medium having computer-executable instructions thereonimplementing a method of protecting a person with a property interest ina piece of real property against a loss of market value of the realproperty during ownership of the property interest, the methodcomprising: determining a base market value of the real property at acurrent time, the current time comprising one of when the propertyinterest in the real property arises and after when the propertyinterest in the real property arises; defining a number of types of lossevents that cause the real property to lose market value as comparedwith the base market value, each of the number of types of loss eventsoccurring prior to the person selling the property interest; selecting anumber of the defined types of loss events for which the person is to beprotected; issuing to the person at about the current time a real estatemarket value insurance policy, the policy promising to compensate theperson for any loss experienced by the person when the real propertyloses market value as compared with the base market value based on anyof the selected types of loss events, the issued policy not requiringthe person to sell the property interest to establish the loss;establishing a premium with regard to the policy based on a calculationof a risk of loss incurred in connection with the policy; collecting theestablished premium; receiving a notification of an occurrence of one ofthe selected types of loss events; transmitting information tocompensate the person with a payment equal to a value of the one of theselected types of loss events; thereafter, receiving a notification of asale of the property interest; determining that the property interesthas regained at least a portion of the value of the one of the selectedtypes of loss events; and collecting an offset payment from the personto offset the payment.
 8. The medium of claim 7 wherein the person withthe property interest in the piece of real property is an owner of thereal property.
 9. The medium of claim 7 wherein determining the basemarket value of the real property comprises the market value thereof atthe current time such as may be obtained if sold to a willing buyer inan arm's length transaction.
 10. The medium of claim 7 wherein the realproperty is selected from land, land with improvements, and improvementswithout attached land.
 11. The medium of claim 7 wherein the marketvalue policy covers losses not covered by a property insurance policy.12. The medium of claim 7 further comprising transmitting information toincur a lien on the property interest equal to the payment.
 13. A systemthat protects a person with a property interest in a piece of realproperty against a loss of market value of the real property duringownership of the property interest, the system comprising: a subsystemthat determines a base market value of the real property at a currenttime, the current time comprising one of when the property interest inthe real property arises and after when the property interest in thereal property arises; a subsystem that defines a number of types of lossevents that cause the real property to lose market value as comparedwith the base market value, each of the number of types of loss eventsoccurring prior to the person selling the property interest; a subsystemthat selects a number of the defined types of loss events for which theperson is to be protected; a subsystem that issues to the person atabout the current time a real estate market value insurance policy, thepolicy promising to compensate the person for any loss experienced bythe person when the real property loses market value as compared withthe base market value based on any of the selected types of loss events,the issued policy not requiring the person to sell the property interestto establish the loss; a subsystem that establishes a premium withregard to the policy based on a calculation of a risk of loss incurredin connection with the policy; a subsystem that collects the establishedpremium; a subsystem that receives a notification of an occurrence ofone of the selected types of loss events; a subsystem that transmitsinformation to compensate the person with a payment equal to a value ofthe one of the selected types of loss events; a subsystem thatthereafter, receives a notification of a sale of the property interest;a subsystem that determines that the property interest has regained atleast a portion of the value of the one of the selected types of lossevents; and a subsystem that collects an offset payment from the personto offset the payment.
 14. The system of claim 13 wherein the personwith the property interest in the piece of real property is an owner ofthe real property.
 15. The system of claim 13 wherein determining thebase market value of the real property comprises the market valuethereof at the current time such as may be obtained if sold to a willingbuyer in an arm's length transaction.
 16. The system of claim 13 whereinthe real property is selected from land, land with improvements, andimprovements without attached land.
 17. The system of claim 13 whereinthe market value policy covers losses not covered by a propertyinsurance policy.
 18. The system of claim 13 wherein the person iscompensated for a loss experienced prior to selling the propertyinterest but is required to offset the compensated loss with any futuregain when the property interest is sold further comprising a subsystemto transmit information to incur a lien on the property interest equalto the payment.